The parietal cells are specialized gastric epithelial cells that play an important role in the regulation of complex programs of cellular growth and differentiation in the stomach. These actions are thought to be secondary to the ability of the parietal cells to produce and secrete growth factors and morphogens, such as TGF-! and Sonic hedgehog (Shh), in the gastric mucosa. Shh, in particular, is a peptide known to have important biological actions in the stomach. Indeed, Shh null mice fail to develop a normal gastric epithelium and pharmachological inhibition of Shh signaling in rodents, leads to enhanced proliferation of gastric epithelial cells and to diminished expression of BMP-4, a mesenchymal protein that inhibits cellular proliferation and promotes epithelial cell differentiation. The mechanisms that mediate the actions of Shh and BMP-4 in the stomach have been only partially elucidated. We reported that the canine parietal cells express and release Shh and that both Shh and BMP-4, induce H/K-ATP-ase gene expression. We also observed that transgenic expression in the gastric epithelium of inhibitors of both Shh and BMP signaling, leads to enhanced MAPK activation, decreased H/KATP- ase expression and to alterations in the architecture of the gastric mucosa. Accordingly, we hypothesize that Shh promotes parietal cell maturation and differentiation and that it inhibits gastric epithelial cell proliferation. We also propose that some of the actions of Shh might be mediated by its ability to regulate the expression of BMP-4 and that this cross talk between epithelial and mesenchymal peptides constitutes an important mechanism for the regulation of gastric epithelial cell homeostasis. In the first specific aim, we will test the hypothesis that some of the actions of Shh in the parietal cells are mediated by its ability to stimulate the expression of BMP-4 from gastric mesenchymal cells. In the second aim, we will examine the actions of Shh and BMP-4 on the growth of canine gastric epithelial cells, focusing our efforts on the effect of these peptides on the MAPK signal transduction pathway. In the third aim, we will investigate the effects of Shh and BMP-4 in vivo, by using transgenic mice expressing inhibitors of both Shh and BMP-4 signaling in the gastric mucosa. Through these studies, we hope to shed new insights that will have significant clinical implications since our findings may contribute to a better understanding of diseases such as peptic ulcer and gastric cancer.